IDAHO PUBLIC UTILITIES
COMMISSION

Case Nos. IPC-E-05-30, -31,
-32, -33

January 11, 2006

Contact: Gene Fadness (208)
334-0339

State regulators have approved Idaho Power Co. sales
agreements with the developer of four wind parks scheduled to be built in
south-central and eastern Idaho.

The developer of all four projects is James Carkulis of the
Montana-based Exergy Development Group. All four projects, if approved, would
start producing energy in November 2006, and be in full operation by May 2007.

The four projects, all of which will be paid for delivery of
10 average-megawatts a month to Idaho Power, include:

Milner Dam Wind Park (IPC-E-05-30) – Located about a mile
west of Milner Dam (west of Burley) in Cassia County, this project includes 12,
1.5-megawatt turbines.

Lava Beds Wind Park (IPC-E-05-31) – Located between
Blackfoot and Arco, this project is also 12, 1.5-MW turbines.

Notch Butte Wind Park (IPC-E-05-32) – Located between Twin
Falls and Shoshone, this project is also 12, 1.5-MW turbines.

Salmon Falls Wind Park (IPC-E-05-33) – Located near Hagerman
and south of Bell Rapids, this project includes 14, 1.5-MW turbines.

The Idaho Public Utilities Commission agreed with Idaho
Power’s contention that the projects were sufficiently far enough along in
development that they should be grandfathered from a commission order in August
that temporarily reduced – from 10 average megawatts to 100 kilowatts – the
size of projects that could qualify for a rate published by the commission for
renewable projects under provisions of federal PURPA legislation.

Congress
passed PURPA, the Public Utility Regulatory Policies Act, during the energy
crisis of the late 1970s. Its purpose is to encourage development of renewable
energy technologies as alternatives to burning fossil fuels or constructing new
power plants. The federal act requires that electric utilities offer to buy
power produced by small power producers or co-generators who obtain Qualifying
Facility (QF) status. The published rate to be paid project developers is set
by state commissions and is to be equal to the cost the electric utility avoids
if it would have had to generate the power itself or purchase it from another
source.

Windland Inc., developers of
the Cotterel Mountain Wind Farm east of Burley, filed comments in the case
asking that approval be delayed until the commission gets financial assurance,
such as a performance bond, that the projects will be completed on their
scheduled completion dates. Windland claims Exergy has been late in meeting
target dates for other projects. Such delays, Windland contends, could cost
ratepayers because Idaho Power would then have to procure alternate wind
sources at a higher cost due to the expiration of a federal production tax
credit for wind at the end of 2007.

The
commission said that while there may be a risk that the projects are not
completed in a timely fashion, the risk is small. Idaho Power’s planning
process is flexible enough to accommodate the risk associated with PURPA
projects, the commission said. “We have no developed record of upfront project
failure to justify the imposition of a performance bond requirement,” the
commission said.

A full text of the commission’s order, along
with other documents related to this case, are available on the commission’s
Web site at www.puc.idaho.gov. Click on
“File Room” and then on “Electric Cases” and scroll down to Case Nos.
IPC-E-05-30, -31, -32 and -33.